Condition reports for strata buildings when using the dispute resolution process
Defects versus maintenance
Building and Energy has observed a trend by strata companies regarding the inclusion of what is considered to be building maintenance items within a defect list, when making a complaint to the Building Commissioner.
Under the revised Strata Titles Act 1985, a formal 10-year plan (condition report) and a reserve fund have become a requirement for strata schemes with more than 10 lots or a replacement value of over $5 million. Full details of the requirements are available on the Landgate website.
Strata companies are engaging building inspectors to undertake a report pursuant to the new requirements for a formal 10 year plan (condition report) and the reports received by Building and Energy generally contain a list of building items including both general building maintenance items as well as building defects.
It is common for strata companies to lodge the entire condition report as evidence of faulty or unsatisfactory building work without first considering if it is faulty work by the builder at the time of construction or a maintenance item that has arisen over time. Examples include external painting which has deteriorated over a five year period; a light fitting not working; and a missing fire extinguisher.
Dispute resolution process
Building and Energy has been receiving condition reports in support of complaints, alleging faulty and unsatisfactory building work. It is Building and Energy’s opinion that these reports should not contain items of faulty or unsatisfactory building work, because these repairs and or replacement would be at the builder’s cost and not the responsibility of the strata company.
A building condition report should either exclude defect items or separate the defect items from maintenance, repair, renewal and replacement items, so that they can be dealt with either directly between the strata company and the builder or through Building and Energy’s dispute resolution process.
If engaged to prepare a condition report for a strata company, identify what is to be accomplished by the inspection and determine the purpose of the inspection, including any specific requirements or conditions. The purpose of the plan should be clear and exclude defects. Only anticipated maintenance, repair, renewal or replacement requirements of the covered items in the period covered by the plan should be included. If they are to be included, they should be listed separately from the maintenance items and not costed into the plan.
When defining the Scope of the inspection, form an understanding between the inspector and the strata company as to what is a defect. The Australian Glossary of Building Terms defines a building defect as a “fault or deviation from the intended condition of a material, assembly or component”. A defect can be a result of defective design, faulty workmanship, substandard materials or non-compliance with the structural performance requirements of the National Construction Code or building permit conditions.
To assist parties further to establish what may be a maintenance item or building “wear and tear” to that of a building defect, Building and Energy has developed the Western Australian Guide to Standards and Tolerances 2019 to use as a convenient reference to the minimum technical standards and quality of work. It should assist inspectors and strata companies to determine if a fault is a legitimate building defect, for which a complaint can be made to the Building Commissioner.
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